CBA to correct misleading cards marketing

The Australian Securities and Investments Commission has criticised the Commonwealth Bank for being misleading in marketing material it sends to credit card customers.

The bank has given ASIC an enforceable undertaking in relation to a message it sent to customers late last year that "may have given customers the incorrect impression that unless they acted immediately they could lose certain rights, including the right to continue receiving credit card limit increase invitations."

The matter relates to changes to the consumer credit legislation that mean that from July 1 this year credit providers cannot send credit limit increase and other invitations to customers unless the customer has previously provided consent.

ASIC found that CBA's message suggested that if customers did not consent they would miss out on opportunities to access extra funds should they need them.

It also found that the message created the impression that customers needed to act urgently, which may have led customers to respond without properly considering their options.

ASIC said in a statement: "Under the changes to the law customers can provide or withdraw their consent at any time. Further, regardless of whether they have consented to being sent credit limit increase invitations, customers can request a limit increase from their financial institution at any time."

Under the enforceable undertaking, the bank has agreed not to rely on the 96,000 consents obtained from customers on December 12 and 13 last year.

The bank will contact each of those customers again to correct any misleading impression and inform them of their rights.

Commonwealth Bank said in a statement: "The bank is 100 per cent committed to supporting the reforms being overseen by ASIC as part of consumer credit protection legislation."